Tax procrastinators get smaller refunds

By Jonnelle Marte

The average tax refunds shrinks as the April 15th filing deadline approaches, IRS data shows. Why? Tax pros say early-bird filers are first in line to submit their returns because they anticipate a big refund check. Procrastinators, not surprisingly, tend to be those more likely to owe.

The average check paid out the week of March 29th was $2,360, down from $2,620 just two weeks before, according to IRS figures released Friday. Of course, this isn’t your typical tax season. Following the last-minute tax deal passed by Congress in January, the IRS pushed back the start the filing season to Jan. 30, leaving the agency with 14 fewer processing days compared to last year. Some forms couldn’t be processed until early March, and a tax prep software filing glitch with form 8863, which is used for education credits, delayed roughly 660,000 refunds by another two to four weeks.

All of that means the IRS is behind in processing returns and issuing refunds, “but we’re catching up week after week,” says IRS spokesman Anthony Burke. The IRS has issued 72.2 million refunds this year through March 29, compared to 75.3 million refunds issued by the same time last year. That 4% lag, however, is a step up from March 1 when the IRS had issued 12% fewer refunds compared to last year.

Late filers don’t just have smaller refunds to worry about. As MarketWatch previously reported, procrastinators also face higher tax preparation fees than early filers, partly because they have more complicated returns. It’s also nearly impossible to book an accountant this year, since many tax pros are struggling to catch up on their workloads.

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About Tax Watch

Only two things in this world can be said to be certain, according to Benjamin Franklin. Tax Watch is about one of them. The blog examines the complicated tax issues and legislative changes to help you tackle tough personal finance challenges – and avoid costly tax missteps. The lead writer is MarketWatch reporter Jonnelle Marte. Contributors include columnists Bill Bischoff, Andrea Coombes, and Eva Rosenberg.